Bitcoin, Lobbying and Anonymity

Some Bitcoin projects are fundamentally incompatible with democratic structures and can never be incorporated in them intact.

Recently we’ve learned that a Bitcoin privacy software project has joined an alliance of lobbyists tasked with “explaining” Bitcoin to the US government. This project seeks to make Bitcoin completely anonymous so that nothing can be known about the participants in any Bitcoin message session (what people characterize as “transactions”). This project brings to Bitcoin, the same privacy that you get with a completely legal, First Amendment of the Constitution protected GPG encrypted message; no one can know the important details of the message. This very strange joining of opposing forces is going to shine a light on the limits of the State and expose the lobbyist’s fundamental misunderstanding of what Bitcoin is for and why it was created. If they did not fundamentally misunderstand Bitcoin, they would never have asked this project to join them in the first place.

Any lobbying group that tries to smooth the path to the state accepting Bitcoin has a hard task in front of them. First, they have to make computer illiterates understand a class of software that even seasoned developers have either a hard time understanding or no experience of. Then they have to explain the economic arguments; how can a money with a permanently limited supply ever work? How can a money without a central issuer work at all leaving aside the incomprehensible “tech details”?

For the sake of argument, lets suppose that the lobbyists have managed to spark a glimmer of broad overview understanding on these people by using analogy and a hands on demonstration of a wallet. In the case of Bitcoin, the lobbyist can calm the fears of the legislators by saying KYC/AML can make Bitcoin “safe”; exchange owners must be subjected to vetting that includes fingerprinting, huge surety bonds, mandatory insurance, embedded Compliance Officers and all the other trappings of the old world that makes them feel safe. But then, something happens.

A New Challenger Arrives

A new addition to the protocol enters the scene, that offers 100% anonymous Bitcoin transactions putting it beyond the reach of any government. How can a lobbyist possibly sell this, even with the developers of the software on board?

This horse will never stop being a horse.

Assuming the software developers are men of integrity and have no intention of adding back doors or any other crippleware features to their tool, there is nothing that the lobbyist can say to them to make them corrupt their software. When the lobbyist goes for a hearing in front of a panel of law makers, all they can do is throw their hands up and say, “We can’t change the software, but at least now you know about it”. The legislators will cry, “SOMETHING MUST BE DONE TO PROTECT THE PUBLIC!”. The lobbyist will go back to the developer, with a list of crippling features who will say something along the lines of, “No”.

We can say for sure that this outcome is absolutely inevitable. The people working on privacy software are motivated by principle, not expedience. They will never corrupt, cripple, weaken, back door, subvert or in any way spoil their software on the advice or pleading of a robotic lobbyist “for the good of society”, because of course, they are making anonymity enabling software for the good of society. And here is the problem; both of these groups believe that what they are doing is for the good of society, they just don’t agree on what that means.

By all means, you can create a lobbying group, spend a million dollars a year on it, write shabby and misleading reports and lobby legislators; in the end, this will not have any effect on the software that is written. If software really is “eating the world” it makes no sense to fight against it, and incorporating its developers into worthless, toothless structures can’t stem its flow either.

Software is being written everywhere on Earth. It can be sent and executed anywhere without permission, and this cannot ever be stopped. The world works well precisely because software can flow where it is needed and be improved upon without permission. Any attempt to interfere with this flow will have catastrophic consequences for the jurisdiction insane enough to try it, and in the case of The Bitcoin Network, interference in it will have catastrophic economic consequences.

We have a foretaste of what this will look like by examining the online Poker industry and how countries that disallow this form of gaming do not collect revenues from that activity, the captive citizens playing online through proxy servers to free countries where the taxes are collected. This will happen with Bitcoin but on a global scale with amounts of money measured in hundreds of billions of dollars.

Bitcoin GitHub History Visualized

You can’t stop The Bitcoin Network and the advance of anonymity by bringing the developers of the tools “on board”. Nothing you can do will stop the inevitable global embrace of Bitcoin on its own terms. The experience of other softwares shows this assessment to be correct; any attempt to stop it is completely fruitless and illogical in addition to being profoundly unethical. Software is not about personal relationships, forming cleverly named groups, attending public hearings or publishing policy statements. It is about one thing, and one thing only; the running binaries.

Eat, or do not eat. It’s binary.I choose eat.Grilled monkfish, mash, house white↴